Key facts
- Indonesia is building Nusantara, a new capital city on Borneo island to replace Jakarta.
- The $30 billion project aims to create a modern, sustainable city powered by renewable energy.
- Construction began in 2022, with the core government district nearing completion.
- Funding cuts and environmental concerns have cast a shadow over the project's future.
- State funding for 2026 has been halved compared to the previous year.
- Investors are demanding greater certainty before committing funds to the project.
Indonesia is constructing Nusantara, a new capital city on Borneo island, intended to replace Jakarta, which faces issues of pollution, overcrowding, and sinking land. The futuristic, sustainable city project, announced in 2019 and with construction beginning in 2022, has seen its core government district near completion. However, the $30 billion undertaking is experiencing delays due to logistical and funding challenges, compounded by Indonesia's recent presidential election.
Concerns have also surfaced regarding the environmental impact on surrounding rainforests and Indigenous communities. The project's future has become uncertain following the October 2024 inauguration of President Prabowo Subianto, a pet project of former President Joko Widodo. State funding for Nusantara was halved for 2026, and Prabowo's delayed visit to the site in January fueled doubts about its priority for the new administration, leading to international press questioning if it could become a 'ghost city.'
Despite these challenges, Basuki Hadimuljono, head of the Nusantara Capital City Authority, remains optimistic, stating that legislative and judicial buildings will be completed next year. The commitment of the current administration and continued investment from both public and private sectors will be crucial for Nusantara's growth.